Three of Japan's biggest banks—MUFG Bank, Mizuho Bank, and SMBC—have set up a council to work out how they can issue a single stablecoin together. The group aims to have a framework ready by the end of fiscal year 2026, which runs through March 2027.
Why a joint effort
Stablecoins are digital tokens designed to hold a steady value, usually tied to a currency like the yen. Right now several Japanese financial firms have been tinkering with their own versions. But a unified push from the country's top three lenders signals a bigger shift—they want a common standard, not a fragmented market.
The council's job is to hash out rules for how the stablecoin would work across their systems. That includes how to manage reserves, handle redemptions, and stay inside the lines of Japan's evolving crypto regulations. The banks haven't said yet whether the stablecoin would be for retail use, business payments, or both.
Regulatory groundwork
Japan has been tightening rules around digital currencies, especially after the 2014 Mt. Gox collapse and the 2018 Coincheck hack. In 2022 the country passed a law that let banks issue stablecoins, but only if they keep full backing in yen deposits. That regulation is what makes the banks' move possible—and also what forces them to coordinate.
The newly formed council includes not just the banks but also legal experts and technology partners, according to a brief statement from the group. None of the participants has been named publicly beyond the three banks. The council's first meetings have already started, though no specific timeline for a prototype has been released.
What the stablecoin might look like
Details are thin, but the basic shape is starting to emerge. A stablecoin issued jointly by MUFG, Mizuho, and SMBC would almost certainly be backed one-to-one by yen deposits held at the banks. That means every token in circulation would have a real yen sitting in a reserve account. The banks would likely charge a small fee for conversions between yen and the stablecoin.
It's not clear whether the token would run on a public blockchain or a private one. Many Japanese lenders have been experimenting with blockchain for years—MUFG launched its own digital currency called Coin in 2019, and Mizuho tested a payment token with local merchants. This joint project could absorb those earlier efforts or replace them.
Next steps
The council has set itself a hard deadline: fiscal year 2026. That gives the group just over two years to solve the technical, legal, and operational puzzles. One unresolved question is whether Japan's Financial Services Agency will require additional rules for a multi-bank stablecoin, or if the existing framework is enough.
The banks haven't said what happens if they miss the 2026 target. The council's next public update is expected within six months, though no exact date has been announced.
